Football authorities may be forced to prop up
Nathan Tinkler
’s rugby league and soccer teams if the Australian Taxation Office winds up his Hunter Sports Group over a $2.7 million tax debt. The company insists the money will be paid.

The tax office on Thursday lodged an application to wind up HSG, which holds Mr Tinkler’s interests in the Newcastle Knights National Rugby League team and the Newcastle Jets A-League club. The tax office claimed the entrepreneur failed to respond within 21 days to a September demand to pay the tax bill.

Although sport administrators said the Knights or Jets would not go out of business, the leagues will likely have to take over the clubs if Mr Tinkler is forced to relinquish control.

This happened previously with the Jets when businessman Con Constantine was stripped of his licence in 2010 by Football Federation Australia, which sold the licence to Mr Tinkler.

A spokesman said Mr Tinkler vowed to settle the payments in the next week.

The tax office application, if it goes ahead, will be heard by the Federal Court in Sydney on February 20.

An spokesman for Mr Tinkler’s company said: “We are surprised by the move by the ATO, as we have not received notification. We advise that any outstanding sum will be paid as soon as possible."

Federal Court documents filed by the tax office claim HSG owes $184,258, Newcastle Jets Football Operations Pty Ltd $1.06 million and Newcastle Knights Pty Ltd $1.42 million. The documents say the tax office sent three demand letters to the registered Queensland address of HSG, the Knights and Jets on September 28.

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The Jets are in Perth to play Perth Glory on Friday night. The Football Federation said it had been given assurances by HSG that the club’s operations would not be affected.

NRL acting chief executive Shane Mattiske said he was confident in the future of the Knights, saying there was a $20 million bank guarantee from Mr Tinkler in place, a condition of HSG taking over the club in August 2011.

According to the deed of sale, HSG had to give the Newcastle Knights Members Club a statement from an auditor showing HSG had upheld key parts of the agreement such as a $10 million sponsorship and working capital.

If HSG failed to meet the obligations, the Members Club could draw on the bank guarantee to make up the shortfall, with HSG legally bound to restore the $20 million.

Under an agreement this week, HSG now has until January 21 to provide the audit statement.

Hunter Sports Group is also being sued by the NSW government over $600,000 in unpaid stadium rent.

Several of Mr Tinkler’s private companies have been placed in liquidation, including Mulsanne Resources, which failed to complete a promised $28.4 million investment in Queensland coal developer Blackwood Corp. Last week his private jet and helicopter were repossessed, in the latest sign of financial strife for the former billionaire, who is now based in Singapore.

Mr Tinkler formed his aviation group after selling his stake in
Macarthur Coal
for $440 million in 2008. He owns properties in Singapore and Maui, racehorses, expensive cars and the two Newcastle sports teams.

Due to a collapse in the coal price in the last 12 months, Mr Tinkler’s fortunes have taken a turn for the worse.

The value of his primary asset, a 19.4 per cent stake in
Whitehaven Coal
, fell from $1 billion in May to around $600 million today.

Mr Tinkler became a shareholder in Whitehaven following a merger with his Aston Resources earlier this year.

In November shareholders decisively voted against Mr Tinkler’s bid to throw out the miner’s board.

Whitehaven chief executive
Tony Haggarty
said Mr Tinkler’s behaviour had led to instability in trading of Whitehaven shares and was disrupting the miner’s business. Industry sources have indicated he has loans of around $700 million which are secured against his Whitehaven stake, including accrued interest.

That means there is potential for the investment to be repossessed by lenders such as hedge fund Farallon Capital. Many of Mr Tinkler’s other assets are also highly leveraged and earn little, if any, income.